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Valuing Unpaid Work Matters, Especially for the Poor

Nancy Folbre is an economics professor at the University of Massachusetts Amherst.

Last Monday I joined other international members of the grandly named Commission for the Measurement of Economic Performance and Social Progress in Paris to present a report commissioned by the president of France on alternatives to reliance on gross domestic product.

We were whisked from our luxury hotel to the presidential palace to an impressive auditorium at the Sorbonne. Organizers, secretaries, drivers, waiters and translators were there to meet our every need, and I hope they were richly paid to do so, increasing France’s G.D.P.

Although my expenses were reimbursed, I volunteered the time I put into the report, as did my husband, whose indirect contributions in the previous month included shopping, cooking, taking me to the hospital emergency room to tend to a smashed finger, and passing up a trip to Paris to stay home and meet the plumber coming to fix a basement leak.

All of these services could have been reported in a time-use survey and assigned a market price (what it would have cost to purchase them were they not contributed free). But they weren’t reported this way, and they won’t show up in any country’s G.D.P.

Such omissions seem less drastic than other shortcomings of our national accounting systems detailed in the report. Our official statistical offices could systematically trace reports of job satisfaction and happiness. They could also develop better measures of the depreciation of natural assets such as forests and fisheries, the costs of air and water pollution, and the risks of destabilizing local ecosystems and global climate.

The movement of women into paid employment represents one of the most important labor force trends of the last 50 years. But as women increased their hours of paid work, they decreased their hours of unpaid work. While men began doing a bit more housework and child care, they didn’t take up the slack. As a result, the increases in G.D.P. that we have experienced since 1960 probably overstate improvements in our living standards.

Sure, our family income went up, but we had to spend a larger portion of that income purchasing food away from home, housekeeping, child care and elder care services that were once provided outside the market.

Our public policies continue to define economic welfare — and eligibility for public assistance — entirely in terms of family income. Yet there is a big difference in living standards among families with the same income but different amounts of time to devote to unpaid work.

Take a household consisting of one full-time wage earner, one stay-at-home parent and two children, relying on an after-tax income of $50,000. Compare this to a similar household in which both parents work full-time for pay, each bringing home about $25,000 in after-tax income.

A stay-at-home parent typically provides more than 40 hours a week of time devoted to housework and child care. Working parents are hard-pressed to provide the equivalent, and in the United States they typically need to purchase child care (unlike those in France, where it is publicly provided).

Yet when considering eligibility for public benefits — such as the health insurance subsidies now under consideration — we treat the two families the same because they earn the same market income.

Similarly, we expect single mothers of young children to work for pay, and we don’t subtract the costs of the child care from their market income when we determine their eligibility for income or health care assistance.

In other words, we ignore the fact that working for pay actually costs money — the money required to purchase substitutes for family care.

The problem here is that housework and child care often expand to take up the time available. If I were getting paid to clean my house, I’m sure my employer would never accept the low productivity of my current method. Should stay-at-home parents be paid by the hour, or by the piece?

I do not know that we will ever measure the value of unpaid work but it is pretty clear to me that at least one of our major social issues – that would be obesity and poor diet – is tied to the increase in the share of market work in our economy.

We all have full time jobs that do not allow us to cook, shop or eat sensibly. Instead we depend on an array of not so healthy but oh so convenient food like products. Because these are usually served up in large portions to give us a sense of value the damage is worse.

Try making money as an adjunct professor, Ms. Folbre, and then discuss unpaid and job related labor.

Obviously, our foolish and regressive income tax system needs to be revised… but many women including low income can’t wait to put the kid into somekind of childcare (Headstart, e.g.) and return to the workplace. In the case of kids who are parked in such situations from 7:30 AM to 5 PM, I would like to suggest that the kids NOT go home at all — bed them down and bathe them where they will be fed, exercised and educated the following day…. It would probably make life easier for the care givers, who could at least be sure that the child was given dinner, a bath, and went to bed at a reasonable hour..

PS. in France, where they have a pretty competant welfare state (including support for unwed Mom’s — yes I know one there), one doesn’t need to be so “richly compensated.”

Again, NYT, you had better start hiring editors who are at least 50 years old and get rid of the babies who can’t do the job at all.

If you were to assign a value to all of these tasks, the only way to balance out a deduction for the contribution of time would be to declare the income first. This is a trick that has been tried many times and failed with the IRS and it makes sense.
If you are contributing something that has been purchased with income that has already had taxes paid on it, then the item is deductible.
The easiest way to look at this is to imagine that you get a gift from someone of a clock you dont like. So you give it to charity.
Surely you don’t think you can deduct the value of that clock?

It is quite feasible to include estimates of the value of unpaid household labor in our estimates of total output. We already include the value of the “rent” that homeowners receive in our calculation of GDP, even though that is not a market transaction. We can do this as well with taking care of children, rather than pretending that there’s no loss to society when no one has time to do this — which is essentially what our current economic statistics do.

Sid (commenter above), housework can be scaled back, but not child care. It’s the most non-scale-back kind of work I’ve ever done. You have to be there 100% and then some when they’re little, just so they stay alive.

A general barometer of a nations wellness, such as Bhutan’s Gross National Happiness, would be an abstract representation of not only measuring the unpaid work that goes on to benefit society but also the productivity of public systems such as medicaid.

According to NPR correspondent Eric Weiner, Bhutan ranks as one of the happiest places on Earth.

The Affordable Care Act imposes economic burdens that are the equivalent of taxes, an economist writes. Read more…

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Economics doesn't have to be complicated. It is the study of our lives — our jobs, our homes, our families and the little decisions we face every day. Here at Economix, journalists and economists analyze the news and use economics as a framework for thinking about the world. We welcome feedback, at economix@nytimes.com.